4+1: The Formula for Successful Innovation

Projects such as eLIZA can’t evolve if we’re afraid of change. They require a culture of innovation, an atmosphere of empowerment and, most importantly, structures and processes that value crazy ideas.

This much is certain: Innovation is a fundamental part of successful entrepreneurship and of central importance not only for future-oriented industries. Innovation continuously and sustainably improves products and services. Done right, it is an ongoing process and it’s never done. If you want to survive, you should never rest on your laurels.

Disruption, on the other and, is innovation’s unruly sister. Disruptive innovation is not about improving an existing product or service but about creating something entirely new. Disruption often works as an outside force, as Harvard Business School professor Clayton Christensen writes in his famous book “The Innovator’s Dilemma,” shaking up industries and potentially destroying entire segments of the economy.

Get moving

You have two options. Either be the deer in the headlights. Or better get moving before another company disrupts and kills your business model. The latter requires constantly questioning your model and re-inventing yourself. Experience shows that the cross-functional collaboration of experts with rookies, thinkers, designers, tinkerers and makers often yields the best results.

At Deutsche Telekom, the department “Product Innovation” (PI), which is part of the board division Technology & Innovation (T&I), is taking up this challenge. PI develops innovative products and enters into partnerships with software and hardware vendors in order to constantly prove Telekom’s innovative mettle.

It takes five to thrive

Empirical innovation research shows that one key to success lies in the discipline to focus on a few things at once, but pursuing those with a combination of perseverance, perfectionism, flexibility and willingness to experiment. Following this advice, we selected 4+1 innovation priorities for 2016. The so-called “blue themes” are close to our core business, close to the net and our current products and services, close to the market and finally close to our customers. These four areas offer a significant value-add that can be measured in euros and in terms of customer satisfaction.

The fifth theme is the so-called “green theme,” having the potential to become a game changer that can radically alter markets. Such a future topic hasn’t been completely defined in terms of technical and economic performance, but we’re researching and evaluating it. The key question here: Under what circumstances can a new technology address one of Telekom’s pain points or business opportunities and do so not incrementally but disruptively?

The result is a “4+1” formula and the following Innovation Topics, which are implemented cross-functionally and in collaboration with all Telekom business units:

T-Connectivity looks at further developing WiFi at home and universal internet access.

Home focuses on seamless convergence and the smart home.

Internet of Things (IoT) deals with a radio technology called NarrowBand IoT.

Groundbreaking changes are also waiting to be discovered in those blue themes. For instance, we have in the past launched and implemented many comprehensive programs to improve customer service. Using artificial intelligence (AI), we are now reaching new heights with a digital assistant called Tinka.

“Using AI frees up our service team members from dealing with routine tasks. That way, we gain valuable time to solve individual customer requests, in many cases the first time they reach out. Disruptive technologies such as Big Data, IoT & Co. also empower our service team members to better respond to customer needs and offer them a personalized service experience across the entire process chain,” says Ferri Abolhassan, managing director of Service Telekom Deutschland and business lead for eCare & eSales @ Innovation Topics.

All new and all in for innovation

You need internal structures to take a fresh look at innovation. That’s why we looked at the way innovation projects were managed in the past. What was successful, what worked well? What can be optimized and what can be scrapped? It helped us draw up some “post mortem lessons learned” and formulate a few rules and recipes to prevent us from falling back into old patterns.

One of them is a new, proper governance for the 4+1. Taking a page from founders and venture capitalists, we allocate funding through a lean Investment Committee. Budgets are approved when predefined milestones for success are met. It creates space to explore, it’s lean and it does away with the steering committees of other large enterprises.

What’s more, we have a special Corporate Innovation Fund (CIF) to support internal innovation projects that pop up during the year. Ideas vying for CIF money have to clearly demonstrate their customer utility and innovative potential with value add for Telekom. They can be entirely new business and product ideas which receive early-stage support to develop a concept, do market research, build prototypes etc. That’s what we call “seed funding.”The second option is focused on “acceleration funding” to quickly scale up existing innovation priorities and projects to make sure they succeed in the market.

We have our own “investment management and enabling team” to support teams in their internal processes so they can focus on the real work. It all runs on a project management tool and agile methods, almost without any slides. To make sure that innovations really make it into the operative business units, every innovation topic lead has at least two business leads with direct responsibility for the market or technology in the respective business unit by their side. We also bring in scientists and technologists to work hands-on with the various teams to build prototypes, write code or produce flip charts.

“The new focus and the fresh approach lay the foundation for a successful implementation in Technology & Innovation (T&I). They boost our innovative capabilities so we can accompany our private and enterprise customers as they explore the digital future,” says innovation head Christian von Reventlow.